The U.S. Department of Agriculture - Rural Development (“USDA”) has announced updates to several chapters of the Single Family Housing Guaranteed Loan Program Technical Handbook (“HB-1-3555”). In a recently published bulletin, the USDA outlines changes to Chapters 4, 5, 8, 9, 10, 15, and 16. In addition, RD Form 3555-21, Request for Single Family Housing Loan Guarantee, has been revised to reflect the updates. That bulletin states that the changes are expected to be implemented on August 5, 2025.
The notable updates in each Chapter are indicated below as excerpted from the USDA announcement:
Chapter 4 – Lender Responsibilities
Under the conflict of interest guidance, the USDA clarifies that only employees that have a direct impact on the mortgage transaction are prohibited from having multiple sources of income from a single Rural Development transaction.
Chapter 5 – Origination and Underwriting Review
- Clarifies that all loan applications should be submitted through GUS and that lenders must use a login.gov account to access GUS.
Chapter 8 – Applicant Characteristics
- Clarifies that upon submission of the application, the lender will ensure a SAM check was performed by documenting the date in GUS.
- References that the Manual File Submission Job Aid should be used for the submission of files not supported by GUS.
Chapter 9 – Income Analysis
- Clarifies taxable income for housing allowances should be included in annual income.
- Added guidance for verifying previous employment.
- Clarifies IRS Form 8821 is an acceptable method to request IRS tax transcripts.
- Clarifies the number of household members must be identified in GUS.
- Adds direct third-party verification to the options for verifying assets.
- Clarifies reserves entered into GUS must not exceed the balance on the most recent official monthly bank statement, however lenders may choose to use a lower balance at their discretion.
Chapter 10 – Credit Analysis
- Clarifies multiple Verifications of Rent may be combined to make up the required 12-month history when no gaps exist.
- Disputed accounts guidance is combined into one section.
- Clarifies the credit report for a non-purchasing spouse is maintained in the lender’s permanent loan file.
Chapter 15 – Submitting the Application Package
- Clarifies all loan applications should be submitted through GUS and references the Manual File Submission Job Aid.
Chapter 16 – Closing the Loan and Requesting the Guarantee
- Clarified attorney opinions letters are acceptable alternatives to title insurance in some instances and provided a chart to clarify the requirements of each.
- Updated the email address for self-reports.
Advanced copies of each chapter and the revised RD Form 3555-21 (DocMagic Form ID: RD355521.RH) can be found on the Loan Origination page of the USDA Linc Training and Resource Library page. The updated RD Form 3555-21 will not be released until the USDA announces a confirmation of the implementation date.
DocMagic will continue to provide USDA updates as they become available. If you have additional questions, please contact DocMagic’s Compliance Department.